16th Finance Commission Submits Report to President

The 16th Finance Commission has submitted its report for the period 2026-27 to 2030-31 to President Droupadi Murmu. The report deals with the distribution of taxes between the Centre and States. The Commission's Chairperson Arvind Panagariya, members Annie George Mathew, Manoj Panda, T. Rabi Shankar, Soumyakanti Ghosh, and Secretary Ritwik Pandey met the President for the formal handover. Copies of the report were also presented to the Prime Minister and Union Finance Minister.

Key Recommendations of the Report

The report includes key suggestions related to the framework for Centre-State tax sharing, allocation among states, grants, and financing mechanisms for disaster management. These recommendations are made for the five-year period starting April 1, 2026, as part of the Commission's mandate.

Formation of the 16th Finance Commission

The 16th Finance Commission was constituted by the President of India under Article 280(1) of the Constitution. As per its terms of reference, the Commission was tasked with determining an appropriate formula for distributing resources while considering the financial capacity, needs, and developmental balance between the Union and the states.

Methodology and Consultation

During its tenure, the Commission conducted an in-depth analysis of financial data from the Centre and all states. Extensive consultations were held with state governments, local bodies, and the central government. Inputs were also taken from former Finance Commission members, academic institutions, multilateral organizations, advisory councils, and subject experts.

Report Structure and Publication

The report has been prepared in two volumes. The first volume contains the Commission's recommendations, while the second volume provides detailed annexures. It will be tabled in Parliament by the Finance Minister under Article 281 of the Constitution before being made public.